Sunday, November 27, 2005

STEEL INDUSTRY

The steel industry is on the roll. Here is an excerpt from the Economist.

By far the most important factor behind steel's revival, however, is China's booming economy. China's soaring demand for steel sent prices spiralling upwards until recently: benchmark hot-rolled coil, which sold for as little as $200 a tonne in 2001, broke the $600 barrier in 2004, though prices have since fallen back (see chart). The boom in prices ushered in a time of profits and high valuations in a business where bail-out and bankruptcy had previously been the norm. (Economist.com, 11/25/05.)

It could be interesting to see what the former chief executive of Nucor, John Correnti, will achieve with his $880 million mini-mill joint venture.

The Institute for Supply Management's business activity indexes have also pointed to jobs gains, especially in the manufacturing sector. A faster pace of job growth is important for consumer spending and would reflect increased business confidence. (BusinessWeek.com, 11/25/05.)